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Investing Tip: Don't Be Penny Wise And Pound Foolish

I believe investing is a combination of skill and luck. It's also, in my opinion, a balance of hindsight and foresight.

Those who've been investing in the stock market for years have probably seen a lot of things. And learned a lot of lessons.

Here's a short parable of a man how turned thirty cents into three thousand dollars.

I know what you're thinking, 'wow, that's amazing!'. But read on. This isn't a short story about an opportunity.

It's a short story about a missed opportunity. But there's lessons to be learned there as well.

Case in point: There was an investor. He really liked a particular stock when it was around $50 and thought it would go to $70 or $80.

One day the stock traded a little below fifty and he put in a bid at $49.50. Well the stock did hit $49.80 but that was as low as it would ever go. It stopped at that level and started going up and a month later he couldn't resist any more and bought it at $70. Shortly after, the stock was back at $60!

The analysis: What happened was this investor missed the ride up for twenty points (2,000 on a hundred shares) and then got caught in a ten point down move (1,000 on a hundred shares).

The outcome: The $.30 this investor wanted to save by buying it at $49.50 instead of $49.80 cost him $3,000.

But there's more. Read the full article at

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.